ANNUAL REPORT 2001 - Prudential plc

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PRUDENTIAL PLC PRUDENTIAL PLC, THROUGH ITS BUSINESSES IN EUROPE, THE US AND ASIA, PROVIDES RETAIL FINANCIAL PRODUCTS AND SERVICES AND FUND MANAGEMENT TO MANY MILLIONS OF CUSTOMERS WORLDWIDE. OUR COMMITMENT TO THE SHAREHOLDERS WHO OWN PRUDENTIAL IS TO MAXIMISE THE VALUE OVER TIME OF THEIR INVESTMENT. WE DO THIS BY INVESTING FOR THE LONG TERM TO DEVELOP AND BRING OUT THE BEST IN OUR PEOPLE AND OUR BUSINESSES TO PRODUCE SUPERIOR PRODUCTS AND SERVICES, AND HENCE SUPERIOR FINANCIAL RETURNS. OUR AIM IS TO DELIVER TOP QUARTILE PERFORMANCE AMONG OUR INTERNATIONAL PEER GROUP IN TERMS OF TOTAL SHAREHOLDER RETURNS. AT PRUDENTIAL OUR AIM IS LASTING RELATIONSHIPS WITH OUR CUSTOMERS AND POLICYHOLDERS, THROUGH PRODUCTS AND SERVICES THAT OFFER VALUE FOR MONEY AND SECURITY. WE ALSO SEEK TO ENHANCE OUR COMPANY’S REPUTATION, BUILT OVER 150 YEARS, FOR INTEGRITY AND FOR ACTING RESPONSIBLY WITHIN SOCIETY. CONTENTS 01 GROUP FINANCIAL HIGHLIGHTS 02 CHAIRMAN’S STATEMENT 03 GROUP CHIEF EXECUTIVE’S REVIEW 06 BUSINESS REVIEW 14 FINANCIAL REVIEW 21 CORPORATE SOCIAL RESPONSIBILITY REVIEW 22 BOARD OF DIRECTORS 24 CORPORATE GOVERNANCE REPORT 27 REMUNERATION REPORT 33 DIRECTORS’ REPORT 35 SUMMARY OF STATUTORY BASIS RESULTS 36 CONSOLIDATED PROFIT AND LOSS ACCOUNT 39 CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 39 RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS’ CAPITAL AND RESERVES 40 CONSOLIDATED BALANCE SHEET 42 BALANCE SHEET OF THE COMPANY 43 CONSOLIDATED CASH FLOW STATEMENT 44 NOTES ON THE FINANCIAL STATEMENTS 71 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PRUDENTIAL PLC 72 FIVE YEAR REVIEW 74 ACHIEVED PROFITS BASIS SUPPLEMENTARY INFORMATION 75 SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT – ACHIEVED PROFITS BASIS 75 EARNINGS PER SHARE – ACHIEVED PROFITS BASIS 75 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES – ACHIEVED PROFITS BASIS 76 SUMMARISED CONSOLIDATED BALANCE SHEET – ACHIEVED PROFITS BASIS 76 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ CAPITAL AND RESERVES – ACHIEVED PROFITS BASIS 77 NOTES ON THE ACHIEVED PROFITS BASIS SUPPLEMENTARY INFORMATION 85 THE ACHIEVED PROFITS BASIS OF FINANCIAL REPORTING 85 INDEPENDENT AUDITORS’ REPORT ON THE ACHIEVED PROFITS BASIS SUPPLEMENTARY INFORMATION 86 SHAREHOLDER INFORMATION ibc HOW TO CONTACT US
PRUDENTIAL AT A GLANCE PRUDENTIAL’S UK & EUROPEAN INSURANCE OPERATIONS Prudential is a leading life and pensions provider in the UK. • Prudential’s UK Insurance Operations provide a range of financial products and services including annuities, corporate and individual pensions, with-profits bonds and investment products to more than seven million customers. • Its products are distributed through a number of channels including direct to customers (telephone, internet and mail), through intermediaries including Independent Financial Advisers and consulting actuaries, through the workplace to its corporate pensions customers and via affinities and banks. • The business currently employs some 8,000 staff located in offices in Stirling, Reading, Belfast and London. Prudential Europe was formed in 1999 to spearhead Prudential’s expansion into continental Europe. Its operations encompass both the manufacture and distribution of Prudential branded products in France and Germany. • Prudential offers single premium savings products in France, as well as critical illness cover and mutual funds in Germany. • Its products are sold through local distribution partners. • Prudential Europe employs some 620 staff at its offices in Dublin, Frankfurt and Paris. www.pru.co.uk www.prudential.fr www.prudential.de M&G Founded in 1931, M&G was acquired by Prudential in 1999 and is the Group’s UK and European fund manager with over £120 billion of funds under management, including £80 billion managed on behalf of the Prudential Assurance Company’s and Scottish Amicable’s long-term funds. • M&G’s retail investment products include unit trusts, PEPs (Personal Equity Plans), ISAs (Individual Savings Accounts), OEICs (Open Ended Investment Companies) and investment trusts. Its institutional business focuses on segregated fixed interest and pooled pension funds. • M&G employs some 1,300 staff and services more than 906,000 unit holder accounts. • Prudential Property Investment Managers, the largest institutional property investor in the UK, and PPM Ventures, a private equity investment business, are also part of the M&G group. www.mandg.co.uk
Page 1: PRUDENTIAL PLC ANNUAL REPORT 2001
Page 5 and 6: GROUP FINANCIAL HIGHLIGHTS 2001 200
Page 7 and 8: GROUP CHIEF EXECUTIVE’S REVIEW WE
Page 9 and 10: The fastest growing age group in th
Page 11 and 12: est growth prospects in the market
Page 13 and 14: Egg 2001 was another year of outsta
Page 15 and 16: Over the last five years, JNL has m
Page 17 and 18: equivalent (APE) basis were £434 m
Page 19 and 20: 69 per cent). The new business marg
Page 21 and 22: differences and other items. The in
Page 23 and 24: However, we have not been discussin
Page 25 and 26: CORPORATE SOCIAL RESPONSIBILITY REV
Page 27 and 28: Executive Directors 1. Jonathan Blo
Page 29 and 30: Nomination Committee Sir Roger Hurn
Page 31 and 32: REMUNERATION REPORT The Remuneratio
Page 33 and 34: Directors’ Long-term Incentive Pl
Page 35 and 36: Directors’ Share Options The Rest
Page 37 and 38: DIRECTORS’ REPORT Principal Activ
Page 39 and 40: SUMMARY OF STATUTORY BASIS RESULTS
Page 41 and 42: Restated † 2001 2000 Long-term Bu
Page 43 and 44: CONSOLIDATED STATEMENT OF TOTAL REC
Page 45 and 46: Restated † 2001 2000 Liabilities
Page 47 and 48: CONSOLIDATED CASH FLOW STATEMENT YE
Page 49 and 50: 3. Significant Accounting Policies
Page 51 and 52: Reinsurance In the normal course of
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Linked business funds Certain long-
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5. Supplemental Earnings Informatio
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7. Segmental Information - New Busi
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9. Segmental Information - Net Asse
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11. Jackson National Life - Additio
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15. Investment Expenses and Charges
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16. Tax continued 2001 2000 £m £m
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21. Fees Payable to Auditors KPMG K
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27. Share Capital and Share Premium
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31. Borrowings continued 2001 2000
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32. Contingencies and Related Oblig
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INDEPENDENT AUDITORS’ REPORT TO T
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2001 2000 1999 1998 1997 Analysis b
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SUMMARISED CONSOLIDATED PROFIT AND
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NOTES ON THE ACHIEVED PROFITS BASIS
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6. Cost of Capital On the achieved
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10. Short-term Fluctuations in Inve
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14. Reconciliation of Movement in S
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THE ACHIEVED PROFITS BASIS OF FINAN
Page 91 and 92:
HOW TO CONTACT US Prudential plc La
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